Iain Duncan Smith has criticised graduates who consider themselves "too good" to stack supermarket shelves as he vowed not to back down after almost all of the government's back-to-work schemes were ruled unlawful.

Duncan Smith issued a direct rebuke to university geology graduate Cait Reilly, 24, from Birmingham, who challenged having to work for free at a local Poundland discount store or face losing jobless benefits.

"You have to learn early that if you commit to something you stay by and do it," he told BBC1's Andrew Marr Show.

Denying claims of "slave labour", he said: "She was paid jobseeker's allowance by the taxpayer to do this. Most young people love this programme and I am sorry but there are a group of people out there who think they are too good for this kind of stuff."

Former Tesco boss Sir Terry Leahy started his career at the retailer stacking shelves, he said.

"The next time these smart people who say there's something wrong with this go into their supermarket, ask themselves this simple question: when they can't find the food on the shelves, who is more important: them, the geologist or the person who's stacked the shelves?"

Lord Justice Pill, Lady Justice Black and Sir Stanley Burnton unanimously agreed the government failed to give the unemployed, and especially those being sanctioned, sufficient public information about the complex schemes for them to be lawful.

If the Department of Work and Pensions fails to be granted an appeal by the supreme court, lawyers say the department will be forced to pay out millions of pounds in order to refund 130,000 job seekers who had their benefits docked after being sanctioned unlawfully.

Late last week, the DWP said fresh guidance letters – required under the law – were being sent to hundreds of thousands of jobseekers placed on the government's Work Programme, the Work Experience programme and a handful of smaller schemes.

The former Tory leader dismissed the court ruling as "rubbish".

"I have already put emergency regulations down. That has ended it. I am not going to give way on this. I absolutely clearly tell you this. People who think it is their right to take benefit and do nothing for it – those days are over."

On Tuesday, in an interview with the Guardian, Reilly who is currently working part-time in Morrisons, said she felt angry when ministers had previously branded her a "job snob".

"I didn't want to be on benefits. I hated it. I wanted to get a job as soon as I could. So for them someone as high profile as that to say: 'Well they're not trying, they're a job snob, they're lazy, they're a scrounger … ' It really made me angry."